Measure D set the Utility Users Tax in the City of Pasadena at 8.28%. It also expanded the types of services to which the tax applies to include any transmission of "voice, data, audio, video or any other information." The Measure D tax is expected to raise about $10 million a year in revenue for the city.

Pasadena has had a "utility users tax" (UUT) since 1969. Taxes collected by imposition of the UUT go into Pasadena's general fund. Local utility taxes such as Pasadena's were made invalid by a federal ruling in 2007.

Election results

Controversy over internet tax

Measure D was similar to phone-and-internet tax measures considered in neighboring cities. However, unlike those neighboring cities, when the Pasadena City Council prepared the language of their bill, they removed words saying that "digital downloads" would not be taxed. This led to concerns that the city council eventually intended to start taxing internet use--when and if the federal government's ban on such taxes expires.

Support

Supporters of Measure D argued that with the new Measure D revenues, the city would not have to cut vital services.

Opposition

A "Committee to Stop Measure D" was officially organized to defeat Measure D. The group was sponsored by FreedomWorks.

In their campaign materials opposing the new tax, they argued:

Pasadena families' taxes will go up!

Pasadena has enjoyed a budget surplus of over $150 million over the past decade, and doesn't need the money that would be raised by this tax.

California already has some of the highest telephone taxes in the U.S.

This law could allow the City of Pasadena to tax Internet use when the federal ban (on taxing internet use) expires.

"This new tax will tax many services never taxed before, that are NOT utility services, like text messaging, digital downloads, prepaid services, and other. The net result is that taxes on wireless services are likely to double for many wireless consumers."

Public opinion

Larry Wilson, public editor for the Pasadena Star News, predicted a loss[2]:

"The infamous telephone tax only needs 50 percent plus 1. But I predict that thanks to City Hall staff bungling and the effective No campaign, which got a huge influx of cash at the last minute and got scary postcards out to at least frequent voters in Monday's mail -- "Need to text your kids? You'll get taxed" -- Measure D will fail. As it should."

Ballot question

The question on the ballot:

Measure D: "Shall an ordinance be adopted to ratify and continue Pasadena’s existing Utility Users Tax to fund general city services, including essential municipal services such as police, fire, street repair, parks and libraries, provided that low-income seniors and disabled residents remain exempt, the ordinance is updated to treat taxpayers equally regardless of technology used, and independent annual audits of the tax are required?"[3]